Shareholders turn on Morrisons over board chaos

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The Independent Online

Investors are calling on Wm Morrison to bring some order to its boardroom after last week's chaotic profits warning.

Investors are calling on Wm Morrison to bring some order to its boardroom after last week's chaotic profits warning.

The supermarket chain announced its third this year - its fourth since buying Safeway - on Friday afternoon. The news surprised the City, coming just weeks after the latest warning and shortly before a planned update at its annual general meeting on 26 May.

In addition, newly appointed chief executive Bob Stott was in Italy on holiday. Sources claimed it had been left to deputy chairman David Jones to convene the board meeting and issue the warning, although an insider denied this, saying chairman Sir Ken Morrison was "very much driving this".

The insider also denied it was unusual for a chief executive to be on holiday while his company issued a profits warning, and stressed that he was in constant phone contact.

But shareholders were less than pleased. One said it was evident Morrisons still had much to do in the boardroom. "It's on a learning curve but the company has changed significantly. The most important thing is that the new finance director is an external candidate. That independence is absolutely key."

The shareholder added that the retailer, which has a poor record in corporate governance and communicating with the City, desperately needed a senior investor relations director.

Another investor added that the departure of long-standing finance director Martin Ackroyd, after the previous warning, had not been in the retailer's best interests. "The one thing we didn't need to do was to squeeze him out. Bad news is never easy to communicate, but there's a way of doing it. Putting a statement out at 3pm on Friday speaks volumes."

Sir Ken could announce non-executive appointments at the AGM. However, an influential shareholder group is recommending a vote against his own reappointment.

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